Is $500,000 a Year Enough?

A common response from the Right to President Obama’s capping of CEO salaries and bonuses at $500,000 a year in companies that take big USG bailout money has been to warn that it will be difficult to attract the best management talent to run those firms.

Uh, wasn’t it those geniuses, the ‘top management talent’ making $20 million a year who ran those companies into the ground in the first place?

Tell you what, just promote a good middle manager who had been making $100,000 a year, and she or he will be very grateful for the job. And before you let them take over, you just give them a three-part test:

1. Fill in the blank:

Buy cheap and sell _________.

2. True or false:

A loan should not be offered to a prospective buyer if the monthly mortgage payments will come to more than 28 percent of the buyer’s monthly income.

3. True or false:

A mortgage loan should not be given to a prospective home buyer unless the buyer can put down at least 10% and preferably 20%.

If the incoming CEO can get those three right, the person will be heads and shoulders above the $20-million-a-year screw-ups who destroyed the American economy.